Privatization & Mortality

If anyone needs further proof that capitalism kills (and warps and maims), on top of the already endless volumes written condemning the system, a recent scientific study published in the highly respected peer-reviewed medical journal The Lancet explores the correlation between privatization and mortality in the former Soviet Union and other Eastern European socialist countries from last century. The study, titled "Mass privatization and the post-communist mortality crisis: a cross-national analysis," is significant because, as the editors of The Lancet introduce it:


A useful drug alters the course of illness in around one in ten people who take it, as opposed to placebo. What about an intervention that saves millions of lives? Or an intervention that kills millions of people? The economic and social restructuring of Eastern Europe, from 1989 onwards, can be regarded as one of the largest public-health experiments in history.



The study examines the effects of mass privatization in the former Soviet Union following the failed reforms to decentralize these centrally planned economies and their subsequent, and in many cases un-desired, transition to neo-liberal capitalism. The authors claim "to our knowledge no study has empirically assessed the role of specific components of transition policies."


The authors, David Stuckler from the University of Cambridge and his colleagues from Oxford and the London School of Hygiene & Tropical Medicine, examined mortality rates in working men aged 15-69 years in formerly socialist countries of Eastern Europe, as well as the former Soviet Union, between 1989 and 2002. They found that mass privatization was associated with a rise in short-term adult male mortality rates of 12.8%. They suggest that unemployment, which rose by 56% during this period, was likely a key contributing factor.

The highest rise in male mortality rates were experienced by the five countries Russia, Kazakhstan, Latvia, Lithuania and Estonia. Together they saw unemployment triple by 305% and male mortality rise by 42%. These countries experienced "rapid mass privatization" in transition from centrally planned economies to capitalist ones.

The authors are not making the case that privatization alone causes an increase in mortality, nor even contribute solely to the conditions which may lend themselves to such an increase. In fact, they show that those countries that adopted a more gradual approach in transition to capitalism, where increased unemployment was absent and where foreign direct investment was prevalent, did not see a marked rise in mortality.

That is not to say that privatization and private ownership of productive assets, defining features of the capitalist system (along with markets and corporate hierarchies), do not help create the conditions which may lead to increased mortality rates. The authors, again focusing only on former so-called socialist countries, find "rapid mass privatization" to be associated with an increase in male mortality rates due to possible contributing factors such as psychological stress, decreased access to medical care, as well as decreased quality of care, increased poverty and unemployment, loss of social capital, social disorganization, and increased alcohol usage. Such factors not only plagued the former so-called socialist countries of last century, before their transition to capitalism, but also afflict actually existing capitalist countries everywhere today.

The key findings of the study are:


Mass privatization programs were associated with an increase in short-term adult male mortality rates of 12·8% (95% CI 7·9—17·7; p<0·0001), with similar results for the alternative privatization indices from the European Bank for Reconstruction and Development (7·8% [95% CI 2·8—13·0]). One mediating factor could be male unemployment rates, which were increased substantially by mass privatization (56·3% [28·3—84·3]; p<0·0001). Each 1% increase in the percentage of population who were members of at least one social organization decreased the association of privatization with mortality by 0·27%; when more than 45% of a population was a member of at least one social organization, privatization was no longer significantly associated with increased mortality rates (3·4% [95% CI −5·4 to 12·3]; p=0·44).



Interpreting these findings the authors propose that "Rapid mass privatization as an economic transition strategy was a crucial determinant of differences in adult mortality trends in post-communist countries; the effect of privatization was reduced if social capital was high. These findings might be relevant to other countries in which similar policies are being considered."


First, there is the authors’ curious use of the phrase "economic transition strategy" which implies here, whether the authors used it purposefully or not, that there was a conscious economic program to move from one economic system (central planning) to another (capitalism). Why would the former socialist block consciously move towards capitalism? Was it a democratic decision desired by the majority population of the USSR? Was it perhaps necessary to transition in light of an expected "inevitable" "failure" or implosion because the "socialist system" could not sustain itself as an economic model and therefore, as proponents of capitalism would have us believe, "collapsed" leaving capitalism triumphant? Others have argued that Gorbachev’s efforts to democratize and decentralize the former Soviet Union (Perestroika and Glasnost) failed because the reforms had to contend with elite sympathetic to capitalism. A complex political battle ensued through which the coalition favoring capitalism took power. Is the authors’ use of the phrase in their interpretation a Freudian slip indicating that they believe, and consequently reproduce the perception, that there is no alternative to capitalism? That may or may not be their intention but The Lancet editor’s statement that "the economic and social restructuring of Eastern Europe, from 1989 onwards, can be regarded as one of the largest public-health experiments in history," and the heart of the study’s conclusion, that "mass privatization" in the move from central planning to capitalism "was a crucial determinant" of differences in adult mortality trends in formerly socialist countries should be seriously considered by those in doubt about capitalism.


What is also interesting is the last finding above, "when more than 45% of a population was a member of at least one social organization, privatization was no longer significantly associated with increased mortality rates," suggesting that greater community organization, solidarity, and perhaps even participation and membership in a social organization ("social capital") significantly diminishes health vulnerabilities in positions of class disparity, however, not completely, nor even remotely enough to ignore class discrepancies in wealth, power, and privilege. The study’s finding suggests that greater community participation can counter the re-production of mild class disparities correlated with extreme consequences (in this case increased mortality rates associated with many other factors) in the economic sphere, at least to a degree. Does this mean that 100% community control over socio-political and economic institutions could greatly enhance quality of life? It is certainly an argument that anti-capitalists have made.


Additionally, critics of capitalism and authoritarianism could point out the adverse effects of market competition on community membership and participation where patterns of bargaining power in market transactions favoring private consumption of goods and services over public ones remove incentive to behave in solidaritous ways that foster community—a necessary pre-condition for collective participation and building "social capital." Critics would also point out that whether an economy is centrally planned or market capitalist people have no decision-making control over their lives. Unless one is positioned within the top 20% of the wealth and power scale, decisions about where one lives, works, and what they produce or consume—their social and material destinies—are determined by structures and forces entirely outside of their control. Such dispossession from power over our lives and the things that affect us, whether from racism, sexism, ageism, or classism—accumulating and generalized oppressions afflicting every moment of daily life—could just as easily result in "psychological stress," alcoholism, and mass anti-social behavior as they do from privatization, poverty, and job loss—factors the authors of the study identify as possible contributors to what they call a "mortality crisis."


Venezuela, a modern day example of how downward re-distribution of wealth and power to communal councils—where community membership and participation is key—suggests support for this last finding. Over the past 10 years significant restructuring of the Venezuelan economy away from private ownership of productive assets and towards communal, cooperative, and participatory ownership has also been paralleled by a lowering of child and infant mortality rates, increased levels of education and literacy, along with improvements in many other social indicators.


The conclusion we should draw, of course, is the necessity of realizing a new classless and participatory society; the result of struggle for transformation of the totality of social and material relations and for perpetuation of self-management, solidarity, equity, and diversity where socio-political and economic institutions are under total social control.

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